ExxonMobil Shelves Ukraine Exploration Amid New 2014 Projects

6 Mar 2014

IRVING, TEXAS–ExxonMobil, the largest publicly traded international oil and gas company, is set to start production on a record number of new projects in 2014. Despite 10 major new undertakings, the company’s capital spending is still expected to fall 6.4 percent this year. Thanks to these major endeavors, about 300,000 more barrels of oil will be produced per day.

Rex W. Tillerson, chairman and chief executive officer, said, “These projects exemplify our focus on maintaining a diversified portfolio and highlight our ability to grow profitable volumes.” One of the new offshore natural gas prospects in the Ukraine, however, will be put on hold due to political unrest in the area. ExxonMobil was in the midst of negotiations with the Ukraine government prior to street battles and massive protests breaking out on the streets. Despite this delay, the company will still move forward with other significant investments in Russia.

Aside from the offshore oil and gas platform in Russia, the Texas-based company’s other projects will exist in Papua New Guinea, Canada, and the Gulf of Mexico.

Over the next several years, the oil and gas company has additional projects planned in countries like Australia, Indonesia, Nigeria, and the United States. By 2017, 1 million net oil equivalent barrels are expected to be added per day. Tillerson said, “Resource and geographic diversity across the portfolio enables us to mitigate risks in a dynamic market environment and maximize profitability through changing business cycles.”

ExxonMobil’s spending is expected to decline significantly in 2014 in spite of the new projects. Capital spending will drop from its peak at $42.5 billion in 2013 to $39.8 billion this year. “We are adding new volumes that improve our profitability mix with higher liquids and liquids linked natural gas volumes. We’re also driving increased unit profitability through better fiscal terms and reducing low-margin barrel production,” Tillerson said. “We have financial flexibility to pursue potential strategic opportunities and maintain a disciplined and selective approach to capital that ensures any new investment will contribute to robust cash flow growth.”

During an annual investment meeting, ExxonMobil reviewed its performance over the past year and discussed plans moving forward to maximize profitability. The company was successful in replacing more than 100 percent of production in 2013.